FDI Structure, Investment Specificity, and Multinationality Value under Host Market Uncertainty

To address mixed results regarding the value of multinationality, we take into account some important but less explored contingent factors related to country and subsidiary asset specificity. From our analyses using a panel dataset of Korean FDI, we find that subsidiaries' local commitment in terms of FDI depth and local sales are negatively associated with multinationality value, whereas their intra-firm trade links to other affiliates are positively associated with the value. We conclude from our findings that in addition to dispersed operations across countries, other country- and subsidiary-specific factors moderate the effect of FDI breadth on multinationality value. We believe our study contributes to the literature by its fine-grained analysis of the environmental and organizational conditions wherein MNCs' multinationality generates value.